Why Game Companies Stopped Making Games - How Money Works

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Today the video game industry is worth more than the movie and music industry combined, and the companies that make these games are some of the most valuable businesses in the world.

The only thing is, they don’t really make video games anymore.

Movie studios are pumping out record numbers of big budget movies which are being viewed by more people on more platforms, but video game studios are doing the opposite.

Rock star, the creators of the infamous Grand Theft Auto series used to release a new game every 4 months on average. But as of mid-2022 their latest game is now almost 4 years old, and there is no news of any new releases coming soon.

#gameindustry #HowMoneyWorks
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Edited By: Andrew Gonzales

Music Courtesy of: Epidemic Sound

Select Footage Courtesy of: Getty Images

All materials in these videos are for educational purposes only and fall within the guidelines of fair use. No copyright infringement intended. This video does not provide investment or financial advice of any kind.

[myopiniondoesntmatter]

Save you 14 minutes:

Games as a service are vastly more profitable than the initial revenue from games.

[ikarosouza]

The reason triple AAA games are becoming so expensive and some are totally failing is just because they focus on tech and not on design. They're treating what were supposed to be enjoyable games as engine demos and not giving enough time to release them properly. You can't just create another GTA V every single year, that shit takes A LOT of time.

[deadlypandaghost]

Another issue is that whenever you sink that much money into a single project, the designers have to give up a significant amount of creative control. Business just won't allow that much money to be spent on an experiment. Everything ends up being the old tried and true so you end up with very samey, uncreative, bland games that look really nice.

[CertifiedClapaholic]

The problem is that gaming companies have gotten too big to take risks anymore. They make copycat games with subscription-based services and that's safe for them. It's corporate business, investors that don't care about the product itself, only the bottom line. They want guarantees and they don't want the companies they've invested in making risky moves with their money. The companies don't want to make risky moves and risk losing their investors.

[ryannygard]

I've been telling my friends this for the past couple years. We are going to see fewer AAA games because games not only have to compete with other new releases but all of the pre-existing games as well. There is just so much competition in this industry.

[estacaotech]

When some people say "games from older generations were better" I must agree.. As a kid I imagined how insane the games would look like with so much more options to buy and play with even better graphics and physics. But sadly nowadays most titles are just cash grabs and the fun part is ignored, its hard to find triple A titles with good and fun gameplay without only pay2win features. Thats why I'm revisiting emulation, indie games and a few AAA titles which are worth the money and also the playtime.

[brownpunk]

Fair to say the golden age of gaming is truly gone..sad really..but glad i grew up gaming in the 90s and early 2000s..sad a lotta kids wont experience the magic we did

[MrMeddyman]

This feels a bit out of touch... AAA games that bomb do so because they were rushed out of the door and burned trust, not because consumers were over-saturated with other games to play, gamers are always thirsting for the next big thing. In the competitive matchmaking space yes their is usually one giant dominating a space and others vying for that position like League of Legends, WoW, Fortnite etc but that's not true for traditional story based titles

[memyselfandi]

Here is my issue with this.

AAA game companies are trying too hard to make the 'biggest game'. Big being, best graphics, biggest worlds, widest variety be in customization, weapons, vehicles etc. Which will need lots of people and technology naturally. Which i could excuse that for big game companies withholding new projects.

Except when you have games like Undertale, Minecraft (before Microsofts purchase) Goosegame, Goat Simulator, powerwash simulator, etc. Getting loads and loads of sales when they're developed by small teams. These games are very basic graphically, have a very short play time (minecraft an exception), no big budget, no fancy effects, no extraordinary acting. But just simple fun

Heck, id be willing to consider Undertale a masterpiece, and it's a very short game.

Players dont want 'big' they want good.

Yes the newer games look pretty, but i promise best graphics isn't necessarily what gamers are aftee. Best graphics should be icing on the cake. Not the whole cake

[VinceroAlpha]

Great video overall but you forgot to mention that the reason for big game launches are flopping is due to the fact that they are utterly complete unfinished products that play exactly like their competition. This trains the customers to not expect much but pay more for detreating quality, which is what the current landscape is, a feedback loop of sad.

[موسى_]

Games companies have a marketing problem. They don't know what consumers want. They seek to satisfy investors before consumers, which is the goal of business, but it is actually against the investors' interests. That's because investors have trouble understanding the long term and understanding marketing and satisfying consumer demand, so they shoot themselves in the foot.
The marketing department needs more power if these companies want to do better. Nintendo has better marketing than the rest, which is why their customers display loyalty; Nintendo knows how to make the games which are in demand. BotW, Odyssey, etc.

[KevinSoriano]

It’s awful sad to see how stuff goes to thrash when the general public gets access. Look at YouTube itself, with its mandatory “ad friendly content”, social media taking over everything, lack of variety due to companies milking “winning formulas” dry; Game companies noticing that the casual player is not demanding quality at all… it sucks.

[heychrisfox]

I feel like the analysis on AAA games near the beginning of the video is a bit off the mark. The problem with many of these "stinkers" is not that the company is investing huge amounts of money only to have their title bomb as if it's just customers not caring. The bigger issue is oversight by the companies themselves. They get so wrapped up in making as much money as possible, that they stop making a game and start making a product. For these stinkers, the idea is "make money first, make a game later." It's cynical and stupid, because naturally their games are going to fail, because they're trying to cobble a game together with paper clips and superglue and then sell it as a luxury product, which naturally results in people seeing through the façade and being mad at the result upon the game's release.

There are tons of hugely expensive AAA titles that returned huge dividends. The way they do this is by making a good game first. Nobody would be happy if they bought something that was advertised under the Ferari brand, only to learn upon buying it that the brakes don't work, it has a hole in the fuel tank, or you need to pay a subscription for heated seats. Similarly, gamers are very aware that if a game is marketed as the best thing since sliced bread, it actually better be well made. If it's not well made (either intentionally or through raw incompetence), that's on the company, not on the consumer.

[ApurvJyotirmay]

Some of the best games I played are single-player, without micro-transaction, and amazing in-game content - OG Halo, Insomniac's Spider-man, Horizon Zero: Dawn, Tomb Raider, Sub-nautica, Mirror's Edge, San Andreas, Unyarn, Haides (and so many great indies which I'm forgetting the names of). Thanks to these heroes on our side. And more power to them

[kaltinhomer]

This is yy no man sky's developers have my utmost respect, , despite the bad launch they pulled up their pants and fixed the game and added soooo much to it *FOR FREE*

[UHPhil]

Now go watch Nintendo make a great AAA title again and again with no microtransactions, no selling off technology, and relatively simple games. That's because they know the recipe and they know what a game should be at the end of the day. Good visual art (not graphics mind you), good music and rewarding gameplay with a cohesive story makes you hooked. They cater more to the end consumer and less to investors.

[abetts]

If the indie game industry says anything, it’s that games should have compelling gameplay not just be a series of cinematic trailers

[Beregorn]

There is a big gaping hole in your analysis, and is the same thing that many AAA developers keep missing: new features are NOT the only thing that can "justify" a new game (using your words), and new features alone are usually not enough to make a good game (unless is something ground-breaking, and even then you have to be careful). A good story is often enough to carry a game on its own, if you don't botch the rest, and a stellar writing will make a classic of videogame out of a buggy mess (see the RPGs of old, for example).
Books, films and TV series have had the same "features" for decades, but people keep enjoying them; the same applies for videogames.

[lephtovermeet]

This is mostly a problem with AAA games. It's also been an issue since like EverQuest 2: developers and marketers (especially for publicly traded companies) are far too in love with graphical and cinematic achievements over game play. OooOooOOO look how pretty it is - but game play is buggy and less than engaging. Then some small team of independent developers or some little passion project department of a larger developer comes out with a gem out of no where with graphics from 5-10 years ago, and people eat it up. Just like big companies have trouble innovating and taking risk, big developers have trouble doing anything other than crunching the numbers for the highest projected ROI.

[spoogerification]

Video games took all the issues in the film industry and was like “how do I make this worse?”